Proverbs 11 14 says where no council is the people fall, but in the multitude of counselors, there is safety.
Bill Walsh said, your mentors in life are important. Choose them wisely. We’ve been talking this month about financial planning. We started off by talking about what financial is from a definition perspective. Last week, we talked about all the domains that’s entailed inside of financial planning. And today I want to talk about how to go about finding a financial planner.
And my supposition is that financial planning enables freedom. Not just financial freedom, but life freedom inside of life.
There are four freedoms, the freedom of purpose, being able to do what you want to do, the freedom of time, being able to do when you want to do it, the freedom of relationships, being able to who be able to do it with whom you want to do it and freedom of money.
It’s that last one that enables all of these. But the challenge like we unpacked last week is that money It’s confusing and complex and complicated. And so how a planner can help is it can streamline a lot of that for you. Get on the same side of the table and act as a coach or guide or quarterback or mentor to help lead you to the achievement of your money and ultimately your life goals.
But then therein lies the problem. How do you find a financial planner? Where do you go? Who do you ask? What questions should you ask? It’s a little bit difficult and honestly a little bit scary too and so that’s what I want to help unpack today how to go about finding a financial advisor or planner to help you Now before we dig in that a little bit you must understand that at least from my perspective on the inside of the industry.
There are really three different types of financial advisors out there and they all call themselves financial advisors, but they do different things. No one is more important or less valuable than the other. They all play a role, but you just must understand what it is you want and what it is you’re getting.
So, let’s unpack those three. roles first. The first one is what I call the financial salesman. This is a person who generally sells products, mainly insurance products or investment products, right? So, IRAs, variable annuities, mutual funds, ETFs, stocks, options, whatever it might be, things like that, or insurance homeowners’ insurance, auto insurance, life insurance, long term care insurance.
Affleck, like supplemental type of insurance, things like that, disability insurance, right? Generally, they sell products, and they get compensated by the products that they sell, generally via commissions, right? And their sole goal is to really sell a product. That’s how they get paid. Again, nothing wrong with that, but you just must understand, is this a person who is a salesman or is this person an advisor or this is a planner?
And that’s how I kind of characterize them. Salesman, advisor, planner, and they do it because they do a little bit different thing. So, this person might call themselves a financial advisor, but they’re financial salesman. Again, which is fine. You just must understand where they are. I use financial advisors that are salesmen to help clients of mine to get products that we need.
Like I don’t sell annuities. I don’t sell insurance. And so, if we need those things, I don’t sell mortgages or, you know, mortgage brokers things like that. So, I will connect people with financial salesmen that they need who, and then I kind of help them along the process. They don’t get ripped off, you know, to make sure that they’re getting the right thing and not getting sold.
And so that’s type number one. Type number two is the traditional financial. advisor. This is a person who really gives you advice, counsels you, you need more of this, you need less of that up, this down, that whatever it is specifically, again, they kind of work in the insurance and investment perspectives, right?
That’s kind of the domains that they centralize in, but they’ll breach out a little bit more. into maybe some estate planning stuff, helping you with that, helping you a little bit of, you know, sometimes I’ll be able to some debt, get rid of debt, things like that, tell you need a little bit more savings.
But generally, they’re giving you. Advice, and normally that advice is, is you know, a subset of things. They, you know, very few people do holistic, multi-domain kind of advice. Some do and we’ll call themselves a financial advisor, but some don’t. And that’s really what I call the third one, which is the financial planner.
Right? So, the financial planner is. is really goal focused, life focused, sometimes value focused. They’re holistic in nature. They look at all those different domains like we unpacked yesterday and understand the relationship between them. For example, you know, like if you just go ask a traditional financial advisor, like you call up fidelity and you get a financial advisor on the line and you ask them, hey, what’s the tax impact of me taking out 40, 000 of my, for my Roth IRA or my traditional IRA, how much will that impact my taxes?
And what’s the impact of that on my social security amount? They’re going to say, we don’t give tax advice, right? But they are a financial advisor, but they don’t give tax advice, right? So, it’s kind of an irony, right? Whereas a planner, Works on all those things and, and what I just outlaid for you is very simple one and right capital to, I’ve, I’ve done it for years with spreadsheets.
So, it’s very simple to do once you know what you’re doing, right? And that’s where planning comes in. Planning looks at all those things, helps you make decisions that achieve your goals, avoid some things that you’re not trying to do and can show you really the impact of a decision to some degree before you take it.
Right. So that’s what a planner is, right? So, three different types of people but they, a lot of times will all label themselves with financial advisors. So, you just must know, again, what you’re looking for and who you’re talking to and what they really do. Okay. So hopefully that makes a little bit of sense to you.
So, what I’m going to unpack today is, is the third category of how to go about finding a financial planner. And the nice thing about really kind of the post pandemic world is that the pandemic forced people to go to zoom. So, you’re not limited per se to just your local people. You were for a long time, but now a lot of people work remotely.
I have clients literally all around the United States, every which corner of it. Some even overseas. And so, the nice thing about zoom connection is, you know, you’re connected to, to all of them. So, you really have now not just the people within a 25, 50-mile radius of your home, but you have really any financial advisor or planner in the world.
So out of the 330, 000 advisors or the hundred thousand plus certified financial planning professionals that there are, how do you go about finding someone? Well, the way I want to unpack this is what, how I would look at it. If Erica and I were looking for a planner and I asked her to some feedback on this, because I wanted to get her perspective, honestly, her answer, her first answer was, why do I need a financial planner?
I have you, which was very flattering. But then I told her what I’m trying to do here. And you know, I wanted to get her perspective of it. If I wasn’t in her life, what would she look for to get another perspective? And then honestly, this is something that we’re probably going to do in the next couple of years not just for me but really for her, I want someone.
My dad died at 49. I’m 46. I don’t think I’m 49, but who knows? Anything can happen. And so, I want her in a good position working with somebody that she has a good relationship. Should something happen to me, either accident, incapacitation, death, whatever it might be that that she has that relationship with that person, they can just continue.
We have someone, Kind of in our life that will help us from a big perspective. Now an advisor, a friend of mine that will handle things, our trust and our stuff for our kids and stuff like that. So technically we do have a financial advisor in our lives but looking for more of a planner. So, when we go about doing it, these are the things that I would be looking for.
And I thought this would be helpful for you. So. Not necessarily in priority order, but some of them, you know, are more important than the other. It’s, it’s kind of a recipe. These are all the things I would like inside of there. So, number one for, for me, and again, this is just me. And it would be different for you, but it can help illuminate something is that I would want someone in who applies a biblical approach to life and money, right?
I am a Christian. My faith is a big important part of my life. And so, I want someone with that same worldview coming at it from that same perspective. Now that might not be as important to you, but What has happened a lot in the financial industry is there’s what’s called a lot of niches or niches, whichever you prefer.
It’s a lot of debate over that. And so, you can find people who specialize in certain things. Like I know some people who just work with Dennis. I know some people who just work with ophthalmologists. No, I heard of one guy who just works with nuclear engineers, right? People who operate at nuclear plants, right?
That’s he used to be one. He switched. That’s all he works with. Business owners, right? So, a whole bunch of people. I heard one guy who just works with Chick fil A owners. Some people are just military focus, right? So, a lot of different, there’s niches out there that people work with different things that are more specialized and some of those subsets have different problems or different outcomes than others, right?
Like if you have an ophthalmologist and you’re looking to sell an ophthalmology. Program and have a cash payout. That’s a big transition. You probably want to work with somebody who knows that world, right? So that that’s what it is for me. So, number two is somebody who’s a fiduciary now, that’s a big fancy word for Someone who is you know has my best interest at heart but not beyond that really, they have a moral and ethical and legal obligation to work in my best interest.
The nice thing about having a certified financial planning professional as your planner is that they are prescribed to a code of ethics that always says you must act as a fiduciary. It’s part of their code of ethics. So, the person I would look for would probably be a CFP professional.
The next thing is that they would be a fee, what’s called a fee only attorney.
Financial advisor, right? So, there’s, there’s kind of commission-based sales initiatives. There’s fee based where they get a fee and a commission and there’s just fee only. So, the idea of a fee only is that all their income comes directly from the clients. They don’t get kickbacks from products they sell.
They don’t get kickbacks from companies. There are no kickbacks. It’s just straight, whatever the client pays. Whatever the that’s what the advisor gets, right? So, there’s no, there’s no other income in there. It’s very transparent in the industry. You know what you’re paying again, nothing. You know, there’s nothing wrong with getting insurance policy and paying an insurance commission.
But from a planning perspective, that’s what we’re talking about here. I personally would want a fee only planner. And the nice thing again about, CFP professional is that again they a lot of times are that they don’t have to be, but they must disclose what they are. And so that would be something I would look for.
So that way they wouldn’t get commissioned. So now, that way I know, you know, and again, you just must know what you’re getting into. But that way I know if someone, for example, if I’m older and someone is recommending me to get an annuity, right? I know on the industry side that that annuity basically pays out four to 8 percent of the total buy in, right?
So that’s a big cha Ching for the person who sells it. But if I have a. A fee only person, you know, and I know that they’re recommending an annuity. I know that they’re doing it because they think it’s in my best interest to help achieve my goals, not because they’re going to get a payout because they won’t even get a payout, right? It goes somebody else.
And so, Mrs. Beautiful number one category was that of solid character. Right? Solid character. And that’s kind of hard to know, to be honest with you, especially when you’re first getting to know people. So that’s some of the nice things about things like YouTube and shows and referrals and people that you work with.
You can kind of get some understanding of who they are and what they work with. I’m going to give you a good tip here at the end of how to maybe flush that out a little bit. But you know, solid character. That would be important. Another one of Mrs. Beautiful was not sleazy, not salesy. She put flashy, you know, in that.
And so, you know, again, this is just us. It might not be you, but you know, it kind of goes along with character and demeanor and how they operate and stuff like that. We’re not flashing the pan type of people, right? And so, you know, especially with Mrs. Beautiful, when she sees somebody like that, like her Spidey’s go up, she gets like, hmm, I don’t know.
What’s that guy up to? What’s that girl up to? Trying to do something. So that’s her natural inclination. Maybe, maybe not so much, but it is with hers, right? So, if we are finding a planner, it’s important for us both to understand what we’re looking for, right? So that’s, that’s another one that we both agreed on is that of a competent planner.
Planner, a competent planner. And so again, something that’s challenging to assess, but it would be things like credentials, certifications, education, things like that. The scope of their services, what all’s entailed in their services. A lot of times you can find that there’s documents, disclosures that professionals must give you.
They’re called Adv. Inside of that, around section four or five, it outlays the services and all and bulletizes a lot of them and it helps you understand what’s involved with that. I would want somebody as holistic in nature again, right? So, they understand how all those things intertwined and they communicate that as part of their verbiage.
I would want someone who is tax prudent, right? Who knows taxes, ideally, maybe that even does taxes, that would be even better. I got to do the taxes for a lot of our financial planning and retirement planning clients as part of the service, right? So, I know that tax is an important thing and the more you pay in taxes while you’re accumulating wealth, the less you have.
And taxes, most people don’t realize this, but in retirement, taxes are generally the number one expense in retirement is taxes. Because so much money is tax deferred. So, I want somebody to, who can reduce taxes. I don’t know about you, but I appreciate the military and I appreciate the roads and I appreciate some of the services that the government pays.
And as a good, you know, patriot and citizen, I will pay every penny I legitimately owe. But I don’t want to overpay him. I don’t want to tip him for good service. Right? So, I want to give him everything I legally can, but not a penny more. That’s just me. Maybe that’s not you, but that’s me. So, I need somebody in my corner who is a tax professional as well.
Next criteria that I look for again, something that’s hard to, to discern, especially when you’re first getting to know them, it’s kind of more of a feely type of thing is again, this is where, you know, you just have to ascertain it working together with them is, is this someone who’s capable of helping someone quote unquote like us, right?
Different people at different levels, different communities, different backgrounds. They have different problems. They have different values. They have different things. Sometimes people don’t work together. Sometimes it just doesn’t work out, right? So, you must find out, is this a person who I can relate to have conversations?
Do I feel? confident with them. You know, I don’t want the person. This is me personally. I don’t want the person with the glasses down, kind of looking down on me and thinking, you know, you’re just a small client. I don’t want to deal with you. I don’t want that personally. I don’t, I try not to never treat people that way myself.
But, you know, so again, is this a person that I would just kind of would like to have a conversation with? That would help ascertain something. This is a big one for me, me personally. Cause again, be on the inside. I’ve, I’ve seen this and it’s that they follow their own advice, right? So, they eat their own cooking, if you will.
I can’t. Stan, maybe it’s just, I’m so biased to it. I can’t stand people who say you do this and then that professional go does something else. Now, if that is in their best interest and that’s in his best interest, that’s okay. But if they’re doing completely different things, that concerns me a little bit.
And so, you know, for example, with investment philosophy, are they going to invest your money the same way You’re investing there’s does their family and wife and spouse and husband and parents, whatever, have the same insurance protection that they do. Right? So don’t recommend something to me that you don’t have.
Right? I don’t like that. I think that’s hypocrisy. I think you should be in alignment. Right? So, for just as an example, when it comes to debt, I advise my clients get on debt. I don’t have any debt. I advise my clients to have savings. We have savings. The way I invest your money and your money, but I Client’s money is the same way I invest mine, so I can, they can rest assured, and I can rest assured when my money’s up, their money’s up, and when mine’s down, theirs is down.
You know, now obviously some things change, you know, here and there based upon what we’re trying to achieve and timing and risk and some of that kind of stuff, but holistically we apply the same philosophy. A lot of times they have the exact same funds that I have, not, not holistically, but for the most part, right?
Because I just think what I’ve done works, and this is what I would do with them if I was in their situation. Assuming they’re in agreement, it’s a collaborative process, right? We’ve talked about that before from a definition of financial planning perspective. So that’s what something I would know. So, I would want to know what does that person do?
Do they do that same thing? And that would be a question I would ask them a lot of times of, hey, when you were making this recommendation, is that what you would do if you were my shoes? Do you do that? You know, these are questions I’d ask. The next thing, again, hard to ascertain this is where you would, you know, try to talk to get some referrals or talk to other people, you know, that you know them.
Who are working with someone is that do they care, right? Do they express care? Like, do they have an interest? They take an active interest in my life. Are they bought in? Some people might not like that. Some people just want a very, you know, distant type of thing. Others. Yeah. Want, you know, a more nurturing relationship.
And that kind of goes into the last thing here, which is just their general approach, right? Like, is it close? Are you engaged or is it distant? What’s their communication style, right? Are they whiteboard type of people or are they PowerPoint presentation? Are they visual? Are they detail? Like I don’t mind details, but I know, I know in my own personal experience, we try to take Mrs.
Beautiful down to too many details. It isn’t going to work, right? Like we can go high level and I can get to one level of details for about five minutes and after 10, 15 minutes, right? She’s a visual and she’s a big picture girl, right? Details aren’t going to work, right? So, communications don’t matter. So, we were to find a planner and he or she just wants to look at spreadsheets for hours and hours long.
It’s not going to work for her, right? I can tell you that. I won’t mind it too much, but. She wouldn’t like it. Right. And just likability again, like, do you like this person? Is this someone you must; you would feel comfortable talking to? Cause you’re going to talk about money. You’re going to talk about your life and your dreams and your fears.
Right. And this is all personal, intimate stuff, right? You know, it’s kind of like, I liken a planner to kind of the third of the trifecta, right? You should have a pastor you should be very comfortable talking to, you should have a physician you should be very comfortable talking to, and you should have a planner you should feel very comfortable talking to, right?
And if you don’t feel comfortable talking to them, that’s probably an indication that maybe you know, that person might not be a good fit for you, right? It might be a minor thing, you know, I don’t know. Right? So, these are the things that we would look for if we, when we are going to hire our own financial planner.
Right? So hopefully those are helpful for you. So, I want to give you two more things here. The next I want to unpack is where to go about starting to look for. So, if you see you wake up and you want to find a financial planner, how do you go about doing it? Well, I’m going to give you some resources, right?
Number one is ask people, ask people again, it’s kind of uncomfortable, but ask people, ask people who generally, you know, they don’t necessarily be doing better than you with money. But. But, you know, obviously don’t ask your broke brother-in-law if they have a financial planner because if they do, probably not working with them, probably not following their advice, probably not somebody to follow, right?
Ideally, find someone who you MLA, who you respect. Maybe ask them, hey, do they have somebody do they work with people, are they open to clients? Things like that. That could be one thing. Friends, colleagues, neighbors, things like that. Obviously, you can just, you know, as you drive around, if you want somebody local, some people do, some people don’t, right.
Just look at signs, you know, and, and billboards and buildings and stuff like that, you can find something there. I’m going to give you a couple of websites that you can go look at and you can explore as well. So, the first one again for me if I was looking for this is that of the CFP board, right? So, the PFP board, I think it’s like let’s plan.
org or something like that Where you can go and find their website and search for someone and kind of narrow down on various characteristics things again.
another one that you can go to is NAPFA the National Association of planners and financial advisors. That’s a good place to go to. Again, they have their website on their X, Y planning network.
That’s a network that I belong to. I know they have a financial planning thing in there and it’s. You know, especially geared towards a lot of younger people as well. So, the challenge working with younger people is that they don’t have the assets. So, a lot of people are asset based. And we talked about that before.
And so, the older people have the money, younger people don’t, but younger people have income that they can pay a retainer or subscription kind of fee from for a fee for advice or, you know, a retainer for advice, things like that. And so that’s a good place to go to. And they have a lot of things where you can kind of filter down on different niches or characteristics, things like that.
One I’ve used in the past and I’ve been a part of is that of the Dave Ramsey network. So, the Dave Ramsey, I’m no longer a part of it now, but I was part of them for a long time, both on the coaching side and the smart Vesta pro perspective. And so that’s a place to go to. I will tell you, put your information in there.
You’re going to get lit up. On phone calls for a couple of days, but it’s just kind of how it works, but it’ll give you some names to go explore. There are other things like that. Smart asset is another one that you can go through who connect you with financial advisors. Again, kind of in your local area.
If you’re looking for Christians based planners, there’s a thing called kingdom advisors that has, you know, a couple of hundreds or maybe thousands of advisors in it. You can go look at those as well. Really, but the, the thing is to just go talk to people, scour the internet, right? There’s a lot of YouTube pages, a lot of podcasts, things like that, where you can go out and find people.
So, a lot of different resources out there that you can go find someone. And again, you’re not limited to just your local area. You could be if you want somebody local, but you also have the whole, you know, the whole world at your, at your demand if you want as well. So, there you go. But let me give you a little bit of advice of how to get started.
Again, this will kind of tell you a flesh out who you’re, who you’re talking to the type of person. If it’s a person who’s after your assets and after your money, you’re probably having either a salesman or an advisor, right? If they’re trying to sell you something or a salesman, right? They say, hey, this is the best investment.
This is the best insurance product. They’re probably a salesman, right? And if that’s what you’re looking for, that’s fine, but just be mindful of it. If you’re looking for a planner, again, that’s what we’re kind of focusing on here. What I would recommend you do is start with some sort of project. A, it could be an hourly thing.
It could be a project-based thing. Where you’re just trying to kind of kick the tires, right? Drive run if you will. So, for example, this is what I do with clients. We start with a true wealth assessment. It’s basically a sequence of meetings where we get to know each other, get to understand their financial situation, where they are, do I like them?
Right? So, all throughout that process, an evaluation process where people can evaluate me as a planner, and I can honestly evaluate them as a client. Is this somebody I want to work with? Because honestly. Life’s too short to have clients that are jerks. I’m just saying, right? Like, I don’t want to work with people like that.
I want people that I can help that I can work with. And sometimes I’ll, I’ll tell them, I think you can go get better help from this person, or you’re really looking for this and go here, or, you know, I’m, it’s not in your best financial interest to work with me, right? Things like that. And I’ll pull point them in different directions.
But what it does is some sort of project. It doesn’t have to be, you know, what I do, it could be a balance sheet assessment. It could be a, you know, some people do comprehensive plans for free, or you could pay for a plan. Some people do all kinds of different things. To help you, it could be in a state review, right?
Some sort of project where you’re working through something. It’s scoped in time and your financial investment is limited. It’s not unlimited. You know what the cost is going in and you know what you’re going to get coming out of it. And what that does is it gives you a little on ramp, a low risk. Kind of low cost, low entry point to explore the idea of working with them.
And then you can use that same framework with multiple different people, if you want to, and kind of test what’s out there.
Imagine what it would be like to have complete control over your money. Clarity on where you are and confidence that you’re on the right path. And they have someone walking aside, you are navigating the path forward.
That is what a financial planner can do for you. your micro action for the week. Think of the characteristics or the attributes that you would want to have in a planner and maybe start reaching out to some or doing some research. If you can think of other attributes or characteristics or things that you can think of, I would love to know, put them in the comments below and try to help other people, right?
We can build off that. So, I’m sure there’s things that I haven’t thought of that would be great to incorporate. So today we talked about how to go about finding a financial planner. We talked about the three types of advisors that there are. We gave you some criteria then we gave you some resources of where to go look and a good way to get started with someone.
I hope this helps you on your financial journey. If you have any questions or comments, you can leave them below or send an email to Mike at true wealth that show. And until next time, I hope you have a great day.
